According to the preliminary forecast of the US Department of Agriculture Outlook Forum, global cotton production exceeded demand in 2019/20, and ending stocks increased slightly by 1 million bales. Global production is expected to grow by 6.8%, yields in many countries have rebounded, and plantings have increased.

Global consumption will continue to increase, but the growth rate is slightly lower than the long-term average. China will gradually expand its cotton imports. The Coulter A Index is expected to be 80 cents/lb, down 5 cents year-on-year due to increased inventories outside of China.

US 2019/20 cotton production is expected to increase to 22.5 million bales, due to an increase in the actual planting area and a sharp drop in the yield. The amount of domestic cotton used in the United States is slightly higher than this year, and the export volume is expected to increase, but the ending stocks will rise.

Global production

In 2019/20, global cotton production is expected to reach 126.5 million bales, up 6.9% year-on-year, the second highest in history, only 0.6% less than the 127.2 million bales in 2011/12. The cotton harvested area is expected to increase by 4% year-on-year to 34.5 million hectares.

Among all cotton-producing countries, the United States increased its production by the largest amount, increasing by more than 4 million bales, an increase of 22.3%. China's output is expected to increase by 500,000 bales, an increase of 2%, reaching 28 million bales. Xinjiang's cotton planting area increased slightly, but the area of the mainland decreased. Offset a part. The reason for the increase in cotton production in China is that cotton yields in Xinjiang have returned to historically normal levels, and the proportion of high-yield areas in the national area continues to expand. India's production is expected to be 28.5 million bales, Brazil's production is expected to increase 600,000 bales, and Australian production is not expected to change.

Global consumption

In 2019/20, global cotton consumption is expected to continue to grow by 1.5% to reach 125 million bales. China's 2.0% consumption growth rate is slightly higher than the global average growth rate, with a cotton consumption of 41.3 million bales. Consumption growth in the rest of the world is slightly lower than in China. The situation in Southeast Asia is not consistent. Vietnam's growth rate is higher than the average, but growth in Indonesia and Thailand is low or stagnant. The growth rate outside South Asia is below average. Only Bangladesh continues to be above average. In addition, the price ratio of cotton and chemical fiber in 2019/20 will remain stable and will also contribute to the increase in cotton consumption.

Global imports and prices

Global cotton imports in the 2019/20 season are expected to be 45 million bales, a slight increase year-on-year, and imports from China, Vietnam and Bangladesh are expected to increase. As supply increases outside China, inventory will also rise. The average value of the Coulter A Index is expected to be 80 cents, down 5 cents year-on-year.

United States

The US cotton area in the 2019/20 season was 14.3 million acres, an increase of 150,000 acres year-on-year, the highest level since 2011/12. US cotton has a yield of 9% and the harvested area is estimated at 12.9 million acres. Based on this calculation, the US cotton production in 2019/20 is 22.5 million bales. The weather and soil conditions in the US Delta and Southeast are good, while the weather in Southwest Texas is dry.

In 2019/20, US cotton exports amounted to 17 million bales, due to the increase in US cotton production and global consumption. The US domestic consumption was 3.3 million bales, and the ending stocks were 6.3 million bales, an increase of 2 million bales. Cotton prices in 2019/20 will be under pressure.